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World Bank Helps Bangladesh Modernize Cash Transfer Programs for Its Most Vulnerable Citizens

DHAKA, January 31, 2018 – The World Bank today approved a $300 million financing to improve the transparency and efficiency of major cash transfer programs in Bangladesh. This will benefit about 5 million of the country’s poorest and most vulnerable people.

The Cash Transfer Modernization Project will help the Department of Social Services under the Ministry of Social Welfare modernize some of the country’s largest cash transfer programs targeted at the poor elderly persons, widows and people with disabilities. The project aims to shift the operating processes of these programs from a manual, paper-based system to an automated, integrated, and electronically managed system. This will ensure greater effectiveness in the overall cash transfer service delivery process.

“Bangladesh has cut by half the number of people living in extreme poverty. This is a remarkable achievement. Yet many people remain poor and vulnerable,” said Qimiao Fan, World Bank Country Director for Bangladesh, Bhutan, and Nepal. “The World Bank is helping the government modernize its safety net programs by improving pro-poor targeting, streamlining administrative systems, and addressing program fragmentations. This will help reach people in need and use public resources more effectively.”

The project will help upgrade the Department’s management information systems as well as build human resource capacity and improve citizen engagement. To identify potential recipients of cash transfers, it will integrate the Department’s management information system with the Bangladesh Bureau of Statistics’ National Household Database. For more secure and accessible payments to beneficiaries, the system will be linked to payment service providers. Using existing digital systems, it will further develop an integrated social protection service delivery system in the country.

“Since 2016, the Department of Social Services has been digitizing program records and piloting digital payments to program beneficiaries. The project will scale up these efforts,” said Yoonyoung Cho, Task Team Leader, World Bank. “These actions are in line with the institutional enhancements outlined in the National Social Security Strategy, 2015. This will help place the Ministry of Social Welfare at the forefront of social protection service delivery, with priority to the poorest and most vulnerable members of society.”

With this project, the World Bank’s total commitment in the social protection sector stands at over $1.3 billion. The credit is from the International Development Association (IDA), the World Bank’s concessional lending arm. The credit is interest-free and repayable in 38 years, including a 6-year grace period, and carry a service charge of 0.75 percent.

The World Bank was among the first development partners to support Bangladesh following its independence. Since then the World Bank has committed close to $27 billion interest-free credits to Bangladesh. In recent years, Bangladesh has been among the largest recipient of the World Bank’s interest-free credits.